UK manufacturing Feb PMI: a Big miss on expectations

The manufacturing sector activity in the UK economy showed a bigger-than expected drop and slowed its pace of expansion sharply in February, the latest data from Markit revealed on Wednesday.

The final Purchasing Managers' Index (PMI) in the UK arrived at 54.6 points in Feb, as compared to a previous 55.7 reading. Markets had predicted a drop to 55.6.

Key Points:    

Output and new orders rise solidly, albeit at slower rates

Price inflationary pressures remain elevated

Rob Dobson of Markit commented in the release, “The latest PMI signals that the UK manufacturing sector continued its solid start to the year. Although rates of expansion in output and new business lost impetus in February, growth remained comfortably above the long-run averages. The survey is signalling quarterly manufacturing output growth close to the 1.5% mark so far in the opening quarter which, if achieved, would be one of the best performances over the past seven years. “The big question remains as to whether robust growth can be sustained or whether it will continue to wane in the coming months.”